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Record foodgrains output in 2021, likely in 2022; price rise, laws repeal hard for agri sector

Record foodgrains output in 2021, likely in 2022; price rise, laws repeal bitter pills for agri sector

This year, India produced a record amount of foodgrains, but the repeal of three agri-reform laws and a steep rise in cooking oil prices cast a shadow over the country’s dependable agriculture sector, which is on track for better crop production in 2022 amidst pandemic tunes.

While rising foodgrain production did help the government offer free additional rations to COVID-affected poor families for many months came as a relief, the year 2021 will be remembered for the lengthy farmers’ protest at Delhi fringes against the three farm laws and subsequent repeal of them.

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The Indian agriculture sector, which was one of the few that remained robust despite the pandemic gales, is expected to grow at a 3.5% annual rate in the current fiscal year ending March 2022.

Foodgrain production reached an all-time high of 308.65 million tonnes in the 2020-21 crop year, which ended in June. In the current crop year, production could reach 310 million tonnes.

For the benefit of farmers, the government purchased large quantities of wheat, rice, pulses, cotton, and oilseeds at the Minimum Support Price (MSP).

Paddy and wheat procurement totaled a record 894.18 lakh tonnes and 433.44 lakh tonnes, respectively, in 2020-21. According to official data, the procurement of pulses reached 21.91 lakh tonnes, coarse grains 11.87 lakh tonnes, and oilseeds 11 lakh tonnes.

As production and purchasing continued smooth manner, the farmers’ agitation, which began in November 2020, came to an end this month when Parliament passed a Bill repealing the three contentious farm laws on the first day of the Winter Session on November 29. In January, the Supreme Court stayed the implementation of these laws.

Farmers’ unions are declaring victory after forcing the Centre to give in to their demands. Economists and government officials, on the other hand, see it as a setback in implementing agricultural marketing system reforms. The verdict on the merits of these three laws is still out.

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Niti Aayog

‘The implementation of the three farm reforms was expected to benefit one-fifth of the country’s farmers. We completely squandered that opportunity. However, I believe that the setback is only temporary’ Ramesh Chand, a member of the Niti Aayog, told PTI.

The Niti Aayog member stated that if farm laws had been implemented, ‘It would have greatly aided in achieving the goal of doubling farmers’ income. We estimated that the implementation of farm laws would result in a nearly 20% increase in income.’

The three laws, passed by Parliament in September 2020, were intended to give farmers marketing freedom beyond notified mandis. The other main goals were to create a framework for contract farming and to regulate the supply of essential commodities only in extreme cases.

Better seed varieties, New technologies, Govt schemes contributed

According to Chand, the agricultural sector’s overall performance has been strong this year. ‘The agricultural growth rate is unaffected. This year, we anticipate 3.5 percent growth in agriculture by the end of March 2022, which is the same as last year’s level’ He stated. Foodgrain production records aided the agriculture sector’s ability to maintain its growth rate.

According to Agriculture Commissioner S K Malhotra, the country’s foodgrain production could reach 310 million tonnes in the 2021-22 crop year (July-June). Good monsoon rains, the adoption of new technologies, and the successful implementation of government schemes such as PM-KISAN have all contributed to the increase in output.

Crop productivity, according to Malhotra, has been increasing as farmers adopt better seed varieties that produce higher yields and have a high nutritional value, in addition to being resistant to diseases and adverse climatic conditions.

The official also stated that the unseasonal rains had a negative impact on perishable and horticultural produce in some parts of the country. As a result, some commodities, such as tomatoes, saw their prices fall. Despite bumper crop production of oilseed crops, edible oil prices skyrocketed to unprecedented highs in response to global cues.

Domestic demand for edible oils met

India meets approximately 60-65 percent of its domestic demand for edible oils through imports, which reached a record Rs 1.17 lakh crore in the 2020-21 season, which ended in October. The price of mustard oil has risen to around Rs 200 per litre, and the price of other cooking oils has also risen.

The government has reduced import duties on palm oil and other oils several times this year to help ease domestic prices, but rates remain high. The government also prohibited futures trading in many commodity markets and imposed stockholding limits on traders and wholesalers in order to keep prices under control.

A sharp increase in rabi oilseed acreage has raised hopes for a drop in cooking oil prices in the coming year. IFFCO, a cooperative major, has launched nano-urea in liquid form, which promises to reduce India’s import and subsidy bill.

‘We started commercially producing nano urea and we have so far produced 1.5 crore bottles of nano urea, which helped save Rs 6,000 crore of government subsidy,’ IFFCO MD U S Awasthi said, urging the government to support the production of such innovative products.

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Huge investments were also made in agritech startups that work in areas such as farm advisory, input provision, and marketing support, among others, in 2021. Drones and other new technologies are being used in agriculture.

The government has already announced the formation of a committee to address the key demand of agitating farmer unions: the establishment of a legal guarantee for the Minimum Support Price (MSP) system.

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